Trade Adjustment Assistance

Although in general international trade provides vast benefits to the United States, some companies and employees can suffer adverse impacts from the competition imposed by increased imports. The Trade Adjustment Assistance programs (TAA), administered by the U.S. Department of Commerce and the U.S. Department of Labor, provide financial and training assistance to companies and employees who are negatively affected by increased international trade.

Trade Adjustment Assistance to Firms was authorized by the Trade Act of 1974 and is managed regionally through 12 nonprofit Trade Adjustment Assistance Centers. A company seeking TAA must be certified for assistance by demonstrating that it makes products that are being imported at increased levels and has declining sales and workers because of customers lost to competing products. Technical assistance to companies may include plant layout, management information systems, human resources, and marketing and promotion assistance. The federal government provides 50 percent of the cost of whatever type of TAA the employer chooses to take advantage. Companies that have elected to receive TAA have developed expanded marketing strategies, used funds to develop expanded product lines to better compete with imports, or adopted new technologies in order to cut costs.

Trade Adjustment Assistance to Workers was first established by the Trade Expansion Act of 1962 and was amended by the Trade Act of 1974 and by other later legislation. In 1993, a program specifically for workers affected by the North American Free Trade Agreement was added. TAA programs are designed to assist workers displaced by increased trade to find new employment. Each state has a Dislocated Worker Unit, which will provide Rapid Response Assistance to workers who are laid off if a petition is filed on their behalf. The purpose of Rapid Response Assistance is to quickly and fully inform laid off workers of the different services available to them under the TAA programs. TAA assistance includes reemployment services such as employment counseling, resume writing, interview skills enhancement, and job search programs; reimbursement of job search expenses; relocation allowances for workers who cannot find work in their local area; training, and income support.

The Trade Act of 2002 reauthorized the TAA programs and expanded the benefits of the program to assist displaced workers in obtaining health coverage. TAA provides tax credits that pay for 65 percent of health coverage. The credits work like the Earned Income Credit and thus workers can be eligible for them even if their income is so low that they do not owe any federal income tax. In addition, an eligible worker can arrange for the credits to be paid in advance to a health insurance company as insurance premiums come due.

Alternative Trade Adjustment Assistance (ATAA) is available to older workers for whom retraining may not be appropriate. Participants in ATAA can elect to accept reemployment at a lower wage than they had been earning and receive a wage subsidy. Apart from the wage subsidy, worker assistance under ATAA is extremely similar to that provided by TAA.